No. 13632 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

19 77 

MICHAEL PURINGTON, 

Plaintiff and Respondent, 

-vsSOUND WEST, A Corporation, 

Defendant and Appellant. 

Appeal from: District Court of the Fourth Judicial District, 

Honorable Edward T,Dussault, Judge presiding. 

Counsel of Record: 

For Appellant: 

Jordan, Sullivan and Baldassin, Missoula, Montana 

Lee A. Jordan argued, Missoula, Montana 

For Respondent : 

Worden, Thane and Haines, Missoula, Montana 

Ronald A. Bender argued, Missoula, Montana 

Submitted: KAY 26 1977 

Decided: JUN 2 9 1977 

Filed: FJUN 2 9 19n 
Mr. Justice Frank I. Haswell delivered the Opinion of the Court. 

This is an appeal from the district court's denial of 

defendant's motion to set aside a default judgment entered in 

Missoula County. 

Plaintiff is Michael Purington, a professional musician 

with the Lost Highway Band, who purchased a sound system for 

$1,350 from defendant Sound West, a corporation,in the summer 

of 1975. In the fall of 1975 the sound system ceased to work 

properly and eventually ceased functioning altogether. According 

to the complaint, defendant assured plaintiff the malfunction 

would be repaired,but plaintiff was compelled to obtain a substitute sound system. Plaintiff alleged that on November 3, 1975, 

defendant represented to him that if he would return the sound 

system, defendant would refund the purchase price. Plaintiff 

alleged he returned the sound system, but no refund was made. 

On April 20, 1976 plaintiff filed a complaint against defendant in three counts: Count I sought refund of the $1,350 

purchase price with interest at 6% from November 3, 1975 to 

date of judgment; Count I1 sought damages of $10,000 for breach 

of implied warranties of merchantability and fitness for a 

particular use; and, Count 111 sought $10,000 compensatory damages 

d 

and $10,000 punitive damages for false repres&ations by defendant 

inducing plaintiff to return the sound system to defendant. 

The sheriff's return showed personal service was made 

on Jim Rhines, president of defendant corporation, on April 21, 

1976. On May 20 default of defendant was entered by the clerk 

of court. On June 10 plaintiff testified in support of his complaint, but his testimony was not reported and is not before us. 
On June 24 a default judgment was entered by the district court 

awarding plaintiff $1,350 with interest at 8% from July 1, 1975 

to date of judgment; damages of $3,000 for loss of wages, use and 

reputation; andplnitive damages of $1,500. Notice of entry of 

judgment was mailed to defendant on June 25. 

On July 1 defendant filed a written motion to set aside the 

judgment on the grounds defendant was never served in the action 

and had no notice of the action at any time. The motion also sought 

a hearing and a stay of execution pending hearing. On the same 

day, the district court set a hearing for July 12 and stayed 

execution on the judgment. 

On July 12 a substitution of attorneys for defendant occurred. 

At the commencement of the hearing on that date, defendant's 

new attorney moved the district court to add two additional 

grounds to its motion to set aside the default judgment: (1) Inadvertence and excusable negligence of defendant, and (2) that the 

default judgment differs substantially from the prayer of the 

complaint. An affidavit of merits was filed together with a 

proposed answer to plaintiff's complaint. The substance of these 

documents was that defendant had not been served in the action and 

defendant had a meritorious defense to the action, viz. the malfunctioning of the sound system was caused entirely by plaintiff's 

misuse of the equipment. 

Jim Rhines, president of defendant corporation, testified 

in support of the motion to set aside the default judgment. The 

gist of his testimony was that he had never been served in the 

action; that had he been served, he would never have permitted the 

default; and that he had a meritorious defense to the action, 

The district court continued the hearing for the purpose of 

locating the sheriff's deputy who signed the certificate of service, 
On September 27 plaintiff filed a motion to dissolve 

the stay order and permit execution on the judgment. Attached 

to this motion was the affidavit of the sheriff's deputy, who 

had been located by plaintiff's attorney in the state of Utah, 

that she personally served Jim Rhines, the president of defendant 

corporation, with a copy of the summons and complaint in the 

action on April 21, 1975, in the offices of defendant at 2701 

Brooks Street in Missoula, Montana. 

A further hearing was held on September 30. At this 

hearing Rhines testified again. He again denied he had been 

served and indicated only two other suits against the corporation had gone by default, one for $300.60 and one for $133. 

He testified that these defaults were permitted on advice of 

counsel as the costs of defense would exceed the amounts sued for. 

At the conclusion of the hearing, defendant's motion to set 

aside the judgment was denied. Plaintiff's motion to dissolve 

the stay of execution was denied. 

On October 28, defendant filed its notice of appeal from 

the order of the district court, Missoula County, denying defendant's motion to set aside the default judgment. 

Defendant alleges an abuse of discretion by the district 

court in four particulars: 

1) Refusing to set aside the default judgment on the 

grounds of defendant's inadvertence or excusable neglect. 

2) Awarding interest greater than prayed for in the 

complaint. 

3) In granting any judgment on Counts I1 and 111. 

4) In awarding punitive damages in an action upon a 

contract. 
Rule 55(c), M.R.Civ.P., provides in pertinent part: 

"For good cause shown the court may set aside an 

entry of default and, if a judgment by default 

has been entered, may likewise set it aside in 

accordance with Rule 60(b) * * *.I1 

Rule 60(b), M.R.Civ.P., provides in relevant part: 

"* * * upon such terms as are just, the court may 

relieve a party * * * from a final judgment * * * 

for the following reasons: (1) mistake, inadvertence, 

suprise, or excusable neglect * * *." 

A motion to set aside a default judgment is addressed to 

the sound discretion of the trial court and this Court will not 

interfere except upon a showing of manifest abuse. Keller v. 

Hanson, 157 Mont. 307, 485 P.2d 705; Johnson v. Matelich, 163 

Mont. 329, 517 P.2d 731. 

Here the only showing of inadvertence or excusable neglect 

was the testimony of Jim Rhine that he had never been served 

in the action. To the contrary was the certificate of service of 

the deputy sheriff and the absence of any evidence that defendant 

attempted to locate her, depose her, or secure her testimony in 

person. It is axiomatic that the burden of proof is on the 

moving party, here the defendant, to establish inadvertence or 

excusable neglect. The testimony of Jim Rhines created no more 

than a conflict in the evidence on the issue of service which 

was resolved against defendant by the trial judge. Under such 

circumstances, we find no abuse of discretion by the trial judge 

in refusing to set aside the default judgment on this ground. 

An error in awarding interest on the purchase price of the 

sound system is clear on the face of the record. The prayer in 

plaintiff's complaint asks for interest at the rate of 6% per year 

on $1,350 from November 3, 1975 to date of judgment. The judgment 

awards interest at the rate of 8% per year on $1,350 from July 1, 

1975 to date of judgment. Rule 54(c), M.R.Civ.P., provides: 
"A judgment by default shall not be different 

in kind from or exceed in amount that prayed for 

in the demand for judgment. * * *I1 

Accordingly, the interest award is ordered amended in conformity 

with the prayer in the complaint. 

The third claim of error is that Counts I1 and I11 fail to 

allege any damass or cause of action. In our view Count 11 

clearly states a claim for breach of implied wananties and seeks 

$10,000 damages by reason thereof. We also find Count I11 states 

a claim for relief based on false representations by defendant 

and seeks $10,000 campensatory and $10,000 punitive damages 

therefor. However, we find that on its face the judgment awarding 

damages on those counts is beyond the power of the district court 

to award. 

On Count 11 the district court made a specific finding 

that "the Plaintiff has been damaged in the amount of Three 

Thousand and ~o/100 Dollars ($3,000.00) for loss of wages, use, 

and reputation" and awarded damages in that amount. Such damages 

for breach of warranties are defined as incidental and consequential damages in the Uniform Commercial Code. Section 87A-2-715, 

R.C.M. 1947. Also see sections 87A-2-11 and 87A-2-714, R.C.B. 

1947. They are special damages, not general damages. The 

distinction is---special damages are the natural but not necessary 

result of the wrong or breach; whereas general damages 

are damages the law would impute as the natural, necessary and 

logical consequence of the wrong or breach. 25 C.J.S. Damages 

5 131. 

Special damages must be specifically pleaded to be recoverable. Rule 9(g), M.R.Civ.P. Here, these items of special 

damages were not pleaded, defendant had no notice that special 
damages were claimed, and the district court had no power or 

authority to award special damages in its default judgment. The 

award of $3,000 damages for these items is ordered stricken from 

the judgment . 

The final claim of error concerns the award of $1,500 

punitive damages on Count 111. Defendant contends punitive 

damages are not recoverable in an action arising from contract, 

citing section 17-208, R.C.M. 1947. We have no quarrel with 

this general proposition or this statute. However, Count 111 

is based on tort, not contract, being a claim for damages based 

on false representations of a refund of the purchase price, if 

plaintiff would return the sound system. See Paulson v. Kustom 

Enterprises, Inc., 157 Mont. 188, 483 P.2d 708. Again, however, 

we find that the judgment on its face is beyond the power and 

authority of the court to the extent it awards plaintiff punitive 

damages. 

Punitive damages cannot be awarded where there are no 

actual damages. Gilham v. Devereaux, 67 Mont. 75, 214 P. 606. 

Here the judgment denied plaintiff's claim of actual or compensatory damages on Count 111, so an award of punitive damages 

was beyond the power or authority of the district court. The 

award of $1,500 punitive damages is ordered stricken from the 

judgment . 

This cause is remanded to the district court for entry 

of judgment in accordance with this opinion; or at the election 

of plaintiff, within 15 days of the date hereof for vacation of 

the entire judgment, the filing and service of an amended complaint and adversary retrial. Each party shall bear its own 

costs. 

Justice